Preliminary Analysis of Export of ROME 24 | 28 SEPTEMBER Services - - PowerPoint PPT Presentation

Cross cutting topic Preliminary Analysis of Export of Services Output in Croatia

Maja Dozet Croatian Bureau of Statistics

ROME 24 | 28 SEPTEMBER 2018

ROME 24 | 28 SEPTEMBER 2018

• Services are an increasingly important component of global production
• International trade in services, particularly exports, forms a key subset of the outputs of

service industries

• Measurement of most trade in services cannot be enhanced through use of customs data or
• ften from other administrative data sources - a challenge in collection of high quality data
• The purpose of presentation is to briefly present a preliminary analysis on export of services
• utput in Croatia

Maja Dozet Croatian Bureau of Statistics 1

Introduction

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• Some of the production of a resident producer may take place abroad,

while some of the production taking place within the geographical boundary of the economy may be carried out by non-resident producer units.

• The distinction between resident and non-resident institutional units is

crucial to the definition and coverage of GDP.

• Production can generate an export only if the production is classified as

domestic production (undertaken by a resident even though the physical process takes place outside the economic territory).

All services rendered by residents to non-residents. Exports form part of the

• utput (credit) of the

economy of the resident unit, and are an input (debit) for the economy of the purchasing non-resident unit.

Maja Dozet Croatian Bureau of Statistics 2

Description of export of services

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• global companies that provide services in the

local markets through subsidiaries presents a challenge in collection of high quality data

• service exports are often under-reported, meaning

that they are growing much faster than any reported numbers

• no recognized set of “harmonized codes” to

categorize services, and so they are categorized inconsistently

• no physical border for them to cross, and no

manifests or bills of lading to be checked and reported at customs

• there is often no paperwork declaring value
• increasing trend of asymmetries between countries

for services exports -differences in concepts, definitions, and compilation practices, which challenge direct comparability of data

Maja Dozet Croatian Bureau of Statistics 3

Characteristics and challenges

The increasingly global nature of economic transactions and arrangements presents a challenge to the application of national accounts concepts and the use of data collection and compilation systems for measuring developments in the domestic economy.

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Maja Dozet Croatian Bureau of Statistics 4

Balance of Payments A statistical summary of the transactions of a given economy with the rest of the world

Elements of Balance of Payments

The current account - international transactions in goods, services, income, and current transfers The financial account - transactions involving financial claims on, or liabilities to, the rest of the world, including international purchases of securities, such as stocks and bonds The capital account - international capital transfers and the acquisition/disposal of non-produced, nonfinancial assets

• internationally agreed methodological standards
• the Balance of Payments and International Investment Position Manual (BPM6) -serves as a base to

the Member States for preparing the balance of payments and international investment

• The end result - achieving statistics comparable between countries and producing high quality data which

reflect the economic reality

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Maja Dozet Croatian Bureau of Statistics 5

Balance of Payments – cont.

• In Croatia, data on exports of services, for the compilation of the GDP, are based on

the balance of payments data of the Croatian National Bank

• The balance of payments of the Republic of Croatia is compiled and published on

a quarterly basis, three months after the end of the reporting quarter Data sources: 1) estimates and statistical research carried out by the Croatian National Bank 2) special reports of the Croatian National Bank (International Transaction Reporting System (ITRS), monetary statistics, securities statistics and reserve assets) 3) reports of the government institutions (Croatian Bureau of Statistics, Ministry of Finance, Croatian Health Insurance Fund and Croatian Pension Insurance Institute)

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Maja Dozet Croatian Bureau of Statistics 6

12 main BPM6 standard services components

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Maja Dozet Croatian Bureau of Statistics 7

Market conditions -export of services, World

International Trade in Commercial Services, 2017 Export of services by services item, World, 2017

million USD

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Maja Dozet Croatian Bureau of Statistics 8

Market conditions -export of services in Croatia

• Service activities account for more than a half of the real sector in the Republic of Croatia
• The export of services (% of GDP) in Croatia was reported at 27.3 % in 2017
• In the years before the global financial crisis, Croatia’s imports grew rapidly in comparison to

its exports

• EU accession in July 2013 boosted exports and significantly improved the export capacity of

Croatian firms

• Croatia now has a comfortable current account surplus but needs to generate persistent

surpluses to ensure the sustainability of the external liabilities

• The persistently negative merchandise trade balance was partly offset by the large surplus

in the balance of services, driven by Croatia's all-important tourism sector

• Croatia is small country – not many multinational enterprises

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Maja Dozet Croatian Bureau of Statistics 9

Market conditions -export of services in Croatia-cont.

• more than 70% of exports of services in Croatia relate to tourism activities
• one of the three EU-28 countries with the largest share of travel services exports in the

country's GDP

Export of services by services items, Croatia, 2017

200 400 600 800 1.000 1.200 1.400 1.600 1.800 2.000 2.200 GERMANY ITALY AUSTRIA SLOVENIA UNITED KINGDOM NETHERLANDS POLAND BOSNIA AND… CZECH REPUBLIC SWITZERLAND FRANCE SLOVAKIA SWEDEN SERBIA HUNGARY UNITED STATES RUSSIAN FEDERATION DENMARK BELGIUM SPAIN IRELAND AUSTRALIA NORWAY JAPAN KOREA, REPUBLIC OF Other countries Unknown countries

million EUR

Travel export in Croatia by export destinations, 2017

Source: WTO, 2017 Source: Croatian National Bank, 2017

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Maja Dozet Croatian Bureau of Statistics 10

Surveys used for the collection of data on export of services

The Croatian National Bank (CNB) conducts several surveys (direct reporting) completely in line with BPM6 and ESA 2010 TRAVEL - starting from the first quarter of 2012,data on revenues from travel services are based on a

combination of the estimated level of tourism consumption in 2011 and an econometrically computed indicator – the first principal component of a group of variables that are assumed to follow the dynamics of tourism revenue (foreign tourist arrivals and nights, the number of foreign travellers at border crossings, total tourist consumption according to the CNB survey, the number of the employed in accommodation and food service activities, the revenues of hotels and restaurants,…)

TRANSPORT - revenues and expenditures are compiled on the basis of the results of the Research on

transactions related to international transportation services, carried out by the CNB

OTHER SERVICES POSITION - compiled by using different data sources: apart from revenues and expenditures

related to insurance services and communication and construction services, the values of all other services are adopted from the uniform statistical survey, which encompasses 30 different types of services

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Maja Dozet Croatian Bureau of Statistics 11

Export of Services and Measurement: Way Forward

• The Croatian Bureau of Statistics conducts a turnover survey with the monthly dynamics of

turnover changes in service activities

• The data are based on the Monthly Report on Trade and Other Services and administrative

data sources (VAT)

• That survey do not collect export of services output separately
• There is a potential to improve the quality of data by introducing a sample of export-
• riented units within the monthly survey on turnover of service activities
• The principal data source for that sample could be the Annual Financial Report of

Entrepreneurs (GFI-POD form) obtained from the Financial Agency

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Maja Dozet Croatian Bureau of Statistics 12

Export of Services and Measurement: Way Forward- possibilities

Annual Financial Report of Entrepreneurs The balance sheet The profit and loss account The additional information related to the previous calendar year The annual turnover of export activities of entrepreneurs A sample of export-

• riented units within

the monthly survey on turnover of service activities

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Maja Dozet Croatian Bureau of Statistics 13

Export of Services and Measurement: Way Forward- possibilities- cont.

• The introduction of a sample of export-oriented units within the monthly survey on turnover
• f service activities would detect turnover achieved by reporting units on foreign markets,
• n the monthly basis
• This approach could lead to a better quality of data, contribute to a better estimate of

the CNB data and could improve comparability of data with other countries

• Also, there is a possibility to deflate export sales with BtoE SPPIs in the future
• Using the aforementioned approach is methodologically more demanding and requires

many systematic analyses, but additional efforts could be awarded, considering the increased quality of statistical output

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14

Thank you for your attention

Contact information Maja Dozet dozetm@dzs.hr +385 1 4806 268